U.S. Residential High-Speed Access To Grow 61% by 2004

The residential broadband access market in the United States is taking off. Six million U.S. customers are forecast to sign up for high-speed access in the year 2000 and that number is expected to grow to more than 28 million subscribers by 2004, according to Dataquest Inc., a unit of Gartner Group, Inc.

Wireline cable modems will be the dominant technology through 2004. The number of cable modem subscribers in the United States is projected to grow from more than 3.3 million subscribers in 2000 to 14 million in 2004. The winning residential broadband strategy over the next year will capture the customers with high-speed access and then layer additional "sticky" service features/applications. The long-term demand for broadband will be significantly affected by the deployment of content-driven applications.

"Content that is compelling, entertaining and relevant to the wants and needs of each customer segment and easy to use will be the pull necessary for households to desire and pay for the 'always-on', high-speed broadband connection," said Patti Reali, senior analyst for Gartner Dataquest's e-Remote Access Worldwide Program. "The value of broadband will not be in the access itself, which will be commoditized over time, but in the delivery of multimedia, voice and other useful and timesaving applications and services that these connections enable."

Digital subscriber lines (DSL) growth is expected to pick up as carriers expand their service in major metropolitan areas. DSL growth in the United States is expected to grow from 1.4 million subscribers this year, to 9.8 million in 2004.

"One of the key factors to DSL growth and success will be the ability to provide compelling, easy-to-use, turnkey product bundles customized for each level of delivered bandwidth and requirements of the target market," said Charles Carr, senior analyst for Gartner Dataquest's e-ISP Strategies Worldwide program. "A major technology leap driving the uptake in DSL in 2000 is the widespread introduction of 'splitterless' technology allowing most end users to self-install, configure and provision."

The broadband applications with the most potential in the residential community will be no pay TV-based video applications such as streaming video and audio services. Gartner Dataquest says service providers must expand the capabilities of their networks to support video and multimedia applications if they intend to effectively differentiate their service portfolio and compete with the wireline cable modem services over the next three years.

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